The 10 biggest financial mistakes that Pete the Planner has ever made

Hi, my name is Pete the Planner, and I make financial mistakes.

Hi, Pete the Planner.

I am not immune to doing stupid things with my money. In fact, I've been doing dumb things since I had my first checking account in 1993. Many of the mistakes I've made were well before I started giving personal finance advice for a living. Thank God. And sadly,many of my mistakes have been stupid and lazy. I know that I'm supposed to say something like, "I don't regret a single one of these mistakes." But I do. I regret every single one of them. I would handle each situation the complete opposite way.

I don't know whether you should take comfort or fear in knowing that I've made some really dumb financial mistakes. But I do know that some people like hearing about others' mistakes. It's easier to learn that way. I've fixed every financial mistake I've ever made, but it hasn't been easy. I'm still dealing with some of the ramifications of some of these mistakes. I am proud to say that I've never stiffed anyone on a bill that I owed money on, and I've learned a ton of life lessons. So here they are, the list of my most embarrassing financial mistakes.

1. Bounced a check on my fraternity's account- I was the treasurer of my fraternity. Go figure. I learned quite a bit about accounting during that time. I also learned not to bounce a check that was written to a vendor. It was a pretty embarrassing incident, if I remember the story correctly. I believe the vendor happened to be the father of one my fraternity brothers. Oops. I was kicked out of my office. They voted me out of office. I didn't get a chance to defend myself at the chapter meeting, I skipped the meeting to play basketball with my friends. Lesson learned. It worked out.

2. Didn't sell my home before I bought a new one- Mrs. Planner and I decided we wanted to move out of our townhouse, and build a new home. We talked to realtor about selling the townhouse, but decided to commit (with money) to building the home, in the meantime. We put the townhouse on the market. Didn't sell. Didn't sell. Didn't sell. Crap. It was April 2007, what could possibly go wrong in the housing market? Boom. Taste it. Loss. We were forced to rent it out because the value of the property fell so quickly. I'm still the reluctant landlord of the property, to this day. While it hasn't been a disaster, it's been a character-building exercise, for sure. I learned all about talking to people who owed me thousands and thousands of dollars. Sigh.

3. Signed up for a fitness membership when I was in high school- This was dumb for no less than 338 reasons. I signed a long-term contract, and didn't quite think it through. I paid the price.

4. Had a mortgage payment considered late, because I paid the wrong amount- This was a weird one. I was used to paying a particular amount on my mortgage, and I paid it religiously every month. I didn't realize that my mortgage amount went up $11, due to an escrow increase, and the mortgage company didn't notify me of my short-pay, until the 29th day. When I paid the additional $11, it was too late. I had a 30 day late payment on my credit report. I blamed my mortgage company for this for a long time. I've changed my mind since then. It was my fault.

5. Had a business checking account go to collections because I left it open- A friend of mine and I decided to open a joint business account to share some marketing expenses early on in our careers. Fast forward two years, we both had left the company we were working for, and forgotten that we left money in the account. The balance was below the minimum balance requirement. The bank started taking fees because of this account. The bank didn't know where to find us, because our business address had changed. The account went negative after about 18 months. Got a collection call. Panicked. Ding on credit.

6. Racked up $3500 worth of credit card debt for no particular reason- It was really dumb. I think it was around 2003 or 2004 and I kept reading about how important it was for me to build my credit. So I put down my debit card, and started using my credit card and paying it off at the end of the month...until I didn't. I can't even tell you what we spent the money on. We looked up one day, and we had a big stupid balance. It was a bit shocking, to be honest. I think this is one I first realized that sometimes what the financial industry tells you is a good idea, actually isn't. Behavior will always ruin technical advice. It did. It does. Don't do it.

7. Had my debit card declined at a grocery store, two weeks after I got married- Embarrassing, you ask? Um, yes. Did I mention my wife was with me? It was classic young kid. I just assumed money would be in my account. It wasn't. I hadn't deposited my paycheck. I'm not making excuses, but no one ever teaches you about that kinda stuff. Nothing like having your new bride stare at you in disbelief when the cashier tells you that you can't afford the food you are buying. That night, I ate humble pie.

8. I day traded in college- It was dumb. I was risking serious money, and knew close to nothing about investing. Over the years I've justified this in many ways, but ultimately, it was a really bad idea. At times, I didn't even go to class because I was glued to my computer screen. I was too young and too dumb to really understand what I was risking. I worked hard during the summers to earn money. And I ended up risking over $10,000 in the market when I was day trading. Although I didn't lose money, it was still stupid. I was lucky, not smart.

9. Got a 40 yr interest-only mortgage- This could have been a disaster, but fortunately my discipline and lucky timing saved me. In 2005, a mortgage broker convinced me that I should refinance my mortgage to a 40 year interest-only mortgage in order to reduce my mortgage payment. He then wanted me to invest the savings created by the lower payment into an index fund. I did this. This plan would have been awful, if I had not saved the difference aggressively. The plan was still awful, and the only thing that saved me was the fact that I freaked out, and starting paying more on the mortgage to repay the principal. This ended-up being lucky timing, because I stopped putting money in the index fund right before the stock market crashed. I was talked into this idea based on a book that my mortgage broker had read. I got very lucky. I still have that mortgage, it's on my rental property, and I still pay it aggressively. Crisis averted. The entire idea was a version of a "get rich quick scheme." I hate that I did this. Again, it worked out, but it shouldn't have.

10. I (currently) spend more than I should on housing- It's true. If you take a look at Pete the Planner's Ideal Household Budget, you'll notice that I want people to spend 25% on housing. I spend more than this. We spend next to nothing on transportation, less than 1% of our income. I put a great deal of the surplus created in this category, toward our housing budget. Since you and I are in the trust tree, my housing spending stresses me out. We aren't overhoused. If we had consumer debt, a car payment of any sort, and didn't save money, I would be really worried. But the fact remains the same, I spend too much on my mortgage payment. I have rectified this the best I could over the years by refinancing my mortgage, increasing my income (I fortunately control my own salary), and saving a larger than normal emergency fund. But it's still a giant mistake. You can't polish a...never mind.

I don't know if I've hit the million-time mark yet, but let me try: our financial lives are dictated by our behavior. We have to set ourselves up to succeed. Your behavior CAN change. Mine did. If you have struggled with any of these mistakes, or any other ones, for that matter, then just know that it's okay. You can change. You should change. I'm very passionate about helping people prevent these mistakes. I lost a tremendous amount confidence in my decision-making ability during these times. I was so upset by some of these stupid mistakes that I'm trying everything in my power to prevent others from reliving them.

What's your biggest mistake? Let's use the comments section as a confessional. Go.